State Looks to Private Partners for Help Rebuilding Energy Infrastructure

Posted on July 07, 2017

NJ Spotlight- With government coffers depleted, state considers public-private partnerships as a way to help finance local and state projects

The state is looking to the private sector to help rebuild and fortify its aging energy infrastructure.

In legislation (A-4508) that advanced in the Assembly prior to the summer recess, lawmakers approved a measure that would encourage public and private partnerships to facilitate energy projects at government buildings.

The impetus behind the bill is that with government coffers drained, the private sector, in partnership with local and state governments, could help design, build, and finance energy projects at a wide range of facilities, including water and wastewater treatment plants, colleges, medical facilities, and municipal buildings.

The legislation, sponsored by Assemblywoman Marlene Caride (D-Bergen), builds on the model of the Economic Stimulus Act of 2009, which allowed higher-education institutions to partner with private developers on projects.

Among the advantages of such public-private partnerships, proponents say the program will allow long-overdue projects to be undertaken without incurring the expense of millions of dollars in public funds.

If the program goes forward, the bill does not include any state appropriation, although a fiscal estimate from the Office of Legislative Services projected the state Board of Public Utilities, which would oversee the program, would incur annual expenses.

Advocates argue that public-private partnerships would allow participants to take maximum advantage of future energy savings, investment in tax credits, abatements, and other types of state and federal loan and incentive programs.

“New Jersey’s aging state and local government-owned energy infrastructure demands significant investments to replace and upgrade obsolete facilities,’’ Caride said. “Ultimately, this is a public safety issue. Enabling government entities to develop needed state-of-the-art energy-related projects to improve the reliability and efficiency of the energy service provided to critical government facilities will prevent power outages during extreme weather.’’

The legislation is seen as increasing in-state cogeneration and other distributed generation resources that can provide power locally — even if the traditional power grid suffers a widespread outage. The policy of developing such resources gained favor with the Christie administration after a series of huge storms left millions without power, such as happened during Hurricane Sandy.

“By leveraging the expertise and financial resources of the private sector, New Jersey can foster the development of a broad array of energy-related projects that budgetary constraints may otherwise preclude,’’ added Assemblyman Gary Schaer (D-Passaic).

Under the bill, an Energy Public-Private Partnership Unit would be established in the BPU to formulate and develop a statewide policy of so-called P-3 agreements.